While there, Harcourt contributed his time to a few interviews and lectures. I have previously mentioned his November 2009 lecture to the Post Keynesian Study Group on the legacy of Joan Robinson. He also gave a May 2010lecture, to the same forum, on the crisis in mainstream economics. Finally, one can find a two-interview on YouTube.

Tuesday, February 22, 2011

Mike Cushman, the secretary of the London School of Economics University and Colleges Union (LSE UCU) writes to the Guardian:

"Philip Inman (Scene of the crime, G2, 18 February) describes the complicity of economics academics in the crash. They were responsible for providing an intellectual gloss for reckless and maybe criminal behaviour. ...They circulated their legitimising patina in the house journals of their club: the leading economics journals beloved of the US and UK business schools.

These journals, a key part of the conspiracy, continue to cast their shadow. It is almost impossible for economists to get employed or promoted in leading economics and management departments like LSE without publishing in these "A-grade" journals. ...It is the same self-referential circulation of authority that underpinned the collateralised debt obligations and other key instruments of the credit bubble. Essential research income is allocated through the Research Excellence Framework by reference to success in those same publications and adjudicated by those who edit and publish in those journals.

Scholars who will not act as shills for the banks and reinforce the Panglossian orthodoxies, and instead promote critical analyses, are rarely welcome in these journals and thus increasingly not welcome in universities... The REF (Research Exalting Finance) is a dangerous, flawed mechanism, at least in economics and management: an ideological straitjacket disguised as a fair and unbiased assessment." -- Mike Cushman

Mr. Cushman's claims are backed up by academic research on the history and sociology of economics. If I recall correctly, Geoffrey M. Hodgson and Harry Rothman1, for example, demonstrate the self-referential and closed nature of the supposedly "leading" journals in economics.Frederick Lee2 adds to the documentation of the unwillingness of mainstream economists to cite non-mainstream economists with empirically validated analyses of the British Research Excellence Framework (REF). In my reading of Lee, the REF is leading to less excellence in British economics, at least if your measure is an ability to understand actually existing capitalist economies.

I have been much influenced, of course, in my views on economics by Joan Robinson. I don't know if I've read these before, but I find her Tanner lectures, "The Arms Race," are available online2. In fact, almost all of the Tanner lecture series can be downloaded. There's just too much to read there, but I will pick out Albert Hirschman's, since I have blogged before on his book drawing from those lectures.

Monday, February 14, 2011

I have argued before that weaknesses in mainstream economics exposed by our current macro-economic problems have been known for decades. I here note another example.

Stephen Smale is a Fields medal-winning mathematician who has advanced our understanding of chaotic dynamical systems. Smale has also contributed to mathematical economics. He wrote the following in 1976:

"A criticism commonly made of economic theory is its failure to make predictions of crises in the country or anticipate correctly unemployment or inflation. One must be cautious in the social sciences about looking towards physics for answers. However, some comparisons with the physical sciences seem profitable in connection with the above criticism. In those sciences, where theory itself is in a far more advanced state, limitations can be seen in a similar way. For example a given individual human body functions according to physical principles; however no physical scientist would predict a heart attack. The physical theory gives understanding of aspects of what goes on in the human body only under very idealized conditions. The physical theories eventually play some role in the education of medical doctors, who can then say some things, some times about a patient's susceptibility to a heart attack, preventive measures, and cures.

The economy of the world or even a nation is a very complex phenomenon, like a human body, involving a number of factors, both economic and political. It is no more reasonable to expect economic theorists to predict a nation's economic future than for a theoretical scientist to predict the future health of an individual...

...I would like to give some reasons why I feel equilibrium theory is far from satisfactory. For one thing the theory has not successfully confronted the question, 'How is equilibrium reached?' Dynamic considerations would seem necessary to resolve this problem. Another is the reliance of the theory on long range optimization.

In the main model of equilibrium theory, say as presented in Gerard Debreu's Theory of Value, economic agents make one life-long decision, optimizing some value. With future dating of commodities, time has almost an artificial role." -- Stephen Smale. "Dynamics in General Equilibrium Theory." American Economic Review V. 66, N. 2 (1976): pp. 288-294.

Saturday, February 12, 2011

When I look at many economists who have won the "Nobel" prize, I often wonder, where is the empirical evidence for their theories? Are they making empirical claims that have passed potentially falsifying tests? It seems to me that both Solow and Lucas, for example, won prizes more on the basis that their work is frequently cited than for expanding our understanding of actually existing economies. Perhaps some, such as Leontief or Stone, won for work providing an accounting framework that is useful in organizing empirical data.

Hence, my title: a celebrity has been defined as somebody who is famous for being famous.

This is a topical post.I was inspired by this list of "top twenty" articles in the American Economic Review, selected by six senior economists.

(While I was writing this post, Merijn Knibbe posted similar thoughts.)

Saturday, February 05, 2011

Russell Jacoby pans Erik Olin Wright's book Envisioning Real Utopias. I don't know much about Jacoby. I find his review encourages me not to read Wright. It would help, however, if Jacoby didn't cite Wright's use of the word "interstitial" as an example of boring cant, while praising Veblen, who also used the word.

Victoria Chick and Ann Pettifor write about the 75th anniversary, on February 3 of Keynes' General Theory.

Eric Schliesser, a philosopher, notes Greg Mankiw's refusal to acknowledge the existence of literature on his points, a topic I'vementionedbefore.

Friday, February 04, 2011

Since he is a mainstream economist at MIT, I should be inclined to take a critical stance to be consistent with my themes. Acemoglu has written so manypapers that I do not feel that I can have a comprehensive view. Maybe I should read up on the summary that must have accompanied his 2005 John Bates Clark medal.

Acemoglu writes on political economy and political science topics I think of interest - for example, power, coercion, social networks, innovation, governance, and economic development. The conclusions he and his colleagues reach are not necessarily a whitewash of capitalism. I've been trying to read, for example, Glenn Ellison and Alexander Wolitzky's paper, "A Search Cost Model of Obfuscation", in which more-or-less competitive firms deliberately put clauses hard to understand in contracts, thereby making it difficult to compare products and to obtain, for example, payouts on warranties, insurance, etc. Most of the papers I've read by Acemoglu and his colleages seem to tell just-so stories with game theory, a branch of mathematics I think can be fascinating. Empirical accounts can be used to illustrate the theories, but I wonder whether the theories are passing potentially falsifying tests. As an exemplar, I take Acemoglu, Egorov, and Sonin's accounts of incidents in the history of the Soviet Politburo in their 2008 Review of Economic Studies paper, "Coalition Formation in Non-Democracies".